A good habit to cultivate

Chances are if you are reading this article, it would mean that you are keen to grow your money in over an extended period on a regular schedule. Before we bring you through this simple 5-minute guide, let us answer 3 key questions.

Full disclaimer: We are not paid or sponsored to write this. So you can trust that this is a simple strategy we advocate for beginners who are ready.

This is where essentially, every month you get a chance to invest in the future of the Singapore government by loaning them some money.

A simple product to understand where you get a paid sum at the end of X number of years you lend them for. It is also useful because you can redeem this product anytime you need it, but of course, you get less interest.

Singapore Savings Bonds

Minimum amount to start

$500

Monthly contribution

Between $500 to $50k

Returns

Effective 2.4% (if hold until 10 years)

Fees

$2 per transaction

How to buy?

Step 1: Have a Bank account with either DBS/POSB, OCBC or UOB and a CDP (central depository) securities account (Free to set up)

Step 2: Apply through ATM or iBanking, the money that you invest will be deducted from your linked bank account

Step 3: Towards the end of the month, you will get the allocation of the SSB allocated and you receive it in the following month

This method is typically recommended to low commitment investing and a relatively passive way to approach longer term horizon.

In Singapore, the common way to do it is via the STI ETF (Straits Times Index, Exchange Traded Fund) where you are betting on an index fund which tracks the top 30 companies in Singapore like DBS, OCBC, Singtel, etc. (from a mix of verticals)

STI ETF Regular Savings Plan

Minimum amount to start

$100

Monthly contribution

Between $100 to >$1000

Returns

Past STI 5.6% (based on last 5 years)

Fees

Roughly around 1% transaction fee

How to buy?

Step 1: Have a Bank account with either DBS/POSB, OCBC, Maybank or POEMS

Step 2: Apply through iBanking, the money that you invest will be deducted from your linked bank account

Step 3: Towards the 15th of month, you will automatically buy the STI ETF based on your preference amount

For example, if you invest in Smartly, it will buy indexes like the S&P 500 (the top 506 companies in the US) and Asian (excluding Japan) indexes. The screenshot above would be the example of Smartly and the various asset classes they will buy and hold on your behalf.

In Singapore, there are 3 players who have recently launched, you can find out more about a comparison here or common questions asked about them.

Robo-Advisor Regular Investment Plan

Minimum amount to start

$1 (Stashaway), $50 (Smartly) and $3000 (Autowealth)

Monthly contribution

Between $100 to >$1000

Returns

Between 5% to 10% (based on YTD returns)

Fees

Between 0.2% to 0.8%

How to buy?

Step 1: Head over to their product pages here: StashAway, Autowealth or Smartly

Step 2: Apply for an account and you will be guided through a process to prove your identity (passport or IC) and a risk assessment profiling

Step 3: Transfer the starting amount based on your projected goals to their bank account

Step 4: Set up automated GIRO Standing Instruction to their account and confirm it on the platform monthly

Step 5: You can log in to the accounts to track the progress of your investments and payouts accordingly

This is where you can consider investing in active mutual funds or individual blue-chip stocks. In a nutshell, blue-chip stocks are companies which are the biggest in the Singapore market with some of the strongest fundamentals.

A few platforms like your banks, FundSuperMart (FSM), POEMS and OCBC actually allow you to do this on a monthly basis. However, there is a certain level of discretion that you asana investor will need to take when choosing which fund or stock to buy on a monthly basis.

Hence, we do not recommend this for normal beginner retail investors unless you have attended some form of course or have done a ton of research on these companies or funds.